The
reorganization of Chicago's transit system following World
War II worked for a number of years. The public Chicago
Transit Authority seemed to be able to do what the private
CRT and CSL couldn't: modify routes, modernize equipment,
and rejuvenate the public image. And the commuter railroads
never saw the loss in riders and revenue of the urban
transit systems, due in part to their national intercity
services that could help defray their costs.

But by 1970, the bright veneer
began to wear off the postwar transit industry.

Despite some economy moves made by
the CTA in the 1950s, there were no solid efforts made to
control costs. The (often correct) belief that increasing
fares would accelerate the decline in ridership left the CTA
no choice but to begin to defer maintenance in some areas.
By the end of the 1960s, the CTA was beginning to have
trouble covering its bonded indebtedness despite three fare
increases. The construction of the Dan Ryan and Kennedy
rapid transit lines in 1969-70, though they increased
ridership by 2.5%, were disastrous to the CTA's bottom line
and further stressed an agency already under enormous
financial stress. For the first time in its history, revenue
from fares ($174.9 million) failed to cover operating costs
($179.1 million).

All things being equal, the CTA
might have survived on its farebox revenues had it not been
the victim of forces beyond its control. Although no one can
deny that the CTA had trouble containing costs, out
migration of population and jobs to the suburbs and blight
in inner urban areas cost the CTA millions of the commuters
who had previously used their services.

Besides these financial troubles,
1970 marked a few other important turning points. For one,
the decennial census showed that Chicago's suburbs had
surpassed the city in population, making it a third
political body to be dealt with in state funding
negotiations. It was also the year that the Illinois state
constitution was revised at a Constitutional Convention. A
new clause was added stating that public funds could now be
used to subsidized private transit carriers, a boon for the
commuter railways in and around Chicago.

Governor Ogilvie persuaded the
state legislature to include $200 million in capital grants
for mass transit in his $900 million state transportation
bond issue after the 1970 Constitutional Convention. With a
new source of income, government turned its attention to the
problems of administration and cost control. Ogilvie
appointed a task force to investigate and, as expected, they
returned with a recommendation for a six-county regional
transit authority. By use of a special taxing district, the
Regional Transportation Authority (RTA) could support each
transit system in the Chicago area as it saw fit.

To avoid allowing the suburbs to
completely control urban transit issues, the Chicago Transit
Authority was left intact. The RTA's power over the CTA was
limited to budgetary oversight and some planning. The RTA
was, however, allowed to cross-subsidize the CTA from the
suburbs.

The March 19, 1974 referendum
creating the RTA clearly showed the widening political rift
between the city and the suburbs. The issue was carried by
less than 1% of the vote, largely on its 71% majority in
Chicago. Suburban Will, Kane, and McHenry Counties showed 9
in 10 voters opposed to the RTA.

It would seem in some ways that the
Chicago political machine won again, with a new source of
funding for their ailing transit system. But the suburbs
quickly turned the RTA into a political battleground. While
the city moved to retain control of the CTA, the suburbs
attempted to minimize the cross-subsidies to the city.
Though the RTA was not completely immobilized by the
struggle, it did severely limit the new agency's
effectiveness over the next few years.

One important aspect of the RTA is
that it was not simply the oversight and planning agency it
is today. The RTA was originally empowered as an operating
agency as well, and indeed did begin to operate a number of
suburban bus and commuter rail lines.